I think making any sort of decision when the decision has been a struggle sort of brings a sense of peace.
I guess I am a little confused... is he still with OW? I know this is not what you want to hear but if he is still in contact with her he will not be able to focus on the marriage. She really will have to be removed from her in every way.
I can't say your plan is a good one or not but I would not tell him if he chooses not to move home you will legally separate. If he chooses not to come home then you know what you have to do for you.